The net loss of total surplus that results from the misallocation of resources is referred to as ______.
a. producer surplus
b. consumer surplus
c. subsidy gain
d. deadweight loss
c. subsidy gain
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Suppose the demand curve for a good is given by the equation Q = 100 - P and the supply curve is given by the equation Q = 0.25P, where P represents the price of the good (measured in dollars per unit) and Q represents the quantity of the good (measured in units per week).
(i) Find the equilibrium price and quantity for this market. (ii) Suppose quantity demanded for the good rises by 10 units at every possible price while at the same time quantity supplied falls by 5 units at every possible price (with the exception that quantity supplied can not drop below zero units at any price). Find the new equilibrium price and quantity in this market. (iii) Given the change in demand, how large would the fall in supply need to be (given the same 10 unit rise in demand) in order for the price to decrease instead of increasing as in part (ii)?
The above table gives the demand schedule for a single-price monopoly. If the marginal cost is $3, the profit maximizing output for the monopoly will be between
A) 1 to 2 units. B) 2 to 3 units. C) 3 to 4 units. D) 4 to 5 units. E) Exactly 5 units.
In the 1850s, the proportion of silver in the currency supply fell, and the proportion of gold rose. This is an illustration of :
a. the quantity theory of money. b. Gresham's law. c. Say's law. d. the Walrasian auctioneer. e. none of the above.
The decisions consumers make about which goods to consume are interrelated because:
A. the enjoyment of one good often depends on the consumption of other goods. B. consumers have perfect information regarding all possible consumption bundles. C. consumers can't always distinguish between goods. D. consumers are often indifferent between different goods.